How much is that CPU in the window?

One of the reasons AMD CPUs are so popular with do-it-yourselfers is that they cost less than comparable chips from Intel. Is AMD forced into deep discounts in order to attract buyers, or are Intel's manufacturing costs higher than its rival, leading to higher prices? According to a new study by research firm In-Stat, it's likely the former, as Intel's CPU manufacturing cost per die is around US$40.

That US$40 price tag has remained constant for a couple of years now and is expected to stay roughly the same at least through year end. Intel's being able to keep the manufacturing costs steady seems pretty impressive considering that fabrication and materials costs have risen during the same timeframe. The chipmaker has managed to keep costs in line by using 300mm wafers and pushing the envelope when it comes to process shrinks.

Many readers will recall that the transition from 130nm to 90nm was plauged with unforeseen problems. In contrast, the move to a 65nm process seems to be going very smoothly. Intel plans to have four plants online that can produce chips using the 65nm process (compared to one for AMD), and the company plans to move all of its chips—CPU, RAM, flash, and logic—to 65nm. The first 65nm CPUs from Intel should be hitting the market in early 2006.

Obviously, we're not paying US$40 for a Pentium D and won't be anytime soon. Intel incurs additional costs with things like its heavy-duty marketing budget, evidenced through its ubiquitous advertising as well as the sweetheart deals it offers partners like Dell who go Intel only. Regardless, it appears that Intel has been able take a page out of Apple's high-margin playbook when it comes to the higher-performance side of its CPU lineup.